The Housing Price Index (HPI) for houses and apartments, compiled by the Central Bank of Cyprus (CBC), showed a deceleration both quarterly and annually in the first quarter of the year. The CBC also forecasts continued deceleration due to significant slowdowns in sale documents not yet reflected in the index.

According to the CBC, the conditions driving the slowdown are shaped by normalized property demand (marginal increase in the number of sale documents), combined with an increase in supply (more available rental and sale properties), rising housing loan interest rates, and relatively small reductions in construction material costs, which remain high.

On a quarterly basis, the HPI (houses and apartments) increased by 1.6% in the first quarter of 2024, compared to a 2.3% increase in the previous quarter. "This rise in the HPI for the first quarter of 2024 resulted from a 0.8% increase in house prices and a 3.4% increase in apartment prices," states the CBC.

Annually, there was a 7.8% increase in housing prices in the first quarter of 2024, compared to an 8.3% increase in the fourth quarter of 2023. Apartment prices rose by 13.9%, while house prices increased by 4.7% during the period under review.

Housing prices on a quarterly basis in the first quarter of 2024 showed accelerated increases in Paphos and Famagusta (3.1% and 4.4%, respectively) while slowing in Nicosia, Limassol, and Larnaca (0.2%, 1.5%, and 2.2%, respectively).

For annual changes in the HPI by district, Paphos and Famagusta saw accelerated increases (11.2% and 11.8%, respectively), while Nicosia, Limassol, and Larnaca experienced slower increases (4%, 9.2%, and 10.7%, respectively).

House prices by district, on a quarterly basis, accelerated in Paphos and Famagusta (3.3% and 2.6%, respectively), while slowing in Limassol, Larnaca, and Nicosia (0.3%, 1.1%, and 0%, respectively). Annually, house prices accelerated only in Paphos (7.1%), with other districts showing slower increases (3.6% in Nicosia, 3.9% in Limassol, 6.6% in Larnaca, and 10.6% in Famagusta).

Meanwhile, apartment prices on a quarterly basis showed a decelerating increase in all districts except Famagusta, where the increase accelerated. Specifically, apartment prices rose by 0.8% in Nicosia, 3.7% in Limassol, 4.3% in Larnaca, 3.5% in Paphos, and 10.7% in Famagusta. Annually, apartment prices saw accelerated increases in Limassol, Larnaca, and Famagusta (16.5%, 18.1%, and 16.5%, respectively). In Nicosia and Paphos, apartment prices recorded slower increases (5.1% and 21.4%, respectively).

Furthermore, according to the Department of Lands and Surveys, sale documents, which cover all property types, showed a significant slowdown, with a marginal annual increase of 0.6% in the first quarter of 2024 (3,597 compared to 3,574 in the first quarter of 2023), reflecting a relative stabilization in overall property demand.

"This slowdown is not yet reflected in the HPI, which, calculated based on market value estimates, incorporates developments in actual transactions with some time lag," explains the CBC.